Buying a home can be very exciting and scary at the same time. Most first time home buyers will experience a full range of emotions as they go through the buying process. This is a completely normal reaction. Homeownership is at an all-time high in America, not just because of low interest rates, but also because more and more people are realizing the benefits, such as:

It takes three things to buy a house: some cash, dependable income and good credit. If you fall short in any of these areas, don't worry. There are plenty of programs out there to help achieve homeownership no matter what your financial situation.

Getting Started

Before you begin the process of buying a property or home you need to consider the following:

Knowing What You Can Afford

Congratulations on making the decision of buying a new home! The first thing you need to decide is how much you can afford. Determining this early in the buying process will save you a lot of time and frustration. Not only will you have a clearer idea of the amount you can spend, but you can also eliminate all those homes that are not in your range. You may even find that being pre-approved opens the doors to a home you hadn't considered before.

7 Steps To Home Financing

1. Credit Report - Contact a credit bureau and get a credit report on yourself, just to make sure your report is accurate. If you don't like what you see, it's time to try to clean up any problem items or clear up any mistakes. You may also want to consider contacting a consumer credit counselor for help.
   
   
2. Save Money - Skip a vacation, movie or dinner out to save money for a down payment and closing costs. Try not to buy anything on credit and if you do, pay it off quickly. Try to avoid taking on another large credit expense or even applying for another credit card.
   
   
3. Get Pre-Approved for a Mortgage - - It pays to get pre-approved for a mortgage early in the process. Some think pre-qualifying for a loan is enough, but it's not. Pre-approval gives you more power when you've found that perfect house.
   
   
4. Buying Power. Lets you know in advance how much you can afford to spend on a home.
   
   
5. More Control. You have the negotiating power of a "cash" buyer when you can prove that you have financing in place.
   
   
6. Faster Closing. You can close in as little as 15 days compared to the average 60 days for those that are not yet approved.
   
   
7. Saves Money. You can lock in an interest rate early for a faster closing and better rate. (Ask your lender about a 30-day rate lock instead of the normal 60 days.)

For Mortgage Information,

CLICK HERE to Pre Qualify for a loan !

What's the difference between Pre-Qualification and Pre-Approval?

Pre-Qualification is a "guesstimate" of what a buyer might qualify for prior to actually submitting a mortgage application. Based on the unverified financial information you provide, the lender uses a quick calculation to arrive at a loan amount. Pre-Approval means that the lender has verified your financial information and has actually committed money in your name for a specific loan type and amount. With today's technology, you can receive loan pre-approval in minutes.

Getting a Loan

By now you should be well into your home search. If you haven't already been pre-approved for a loan, now is the time. Pre-approval lets you know in advance how much you can afford to spend, gives you more negotiating power because you have financing in place and can save you money by locking in an interest rate early in the buying process.

Getting a loan to buy a house is now easier than ever. You can actually receive loan approval in as little as four minutes. No money for a down payment? Poor credit? A first-time home buyer? No matter what your needs are, there are hundreds of loan products available to suit most financial situations.

For Mortgage Information,

CLICK HERE to Pre Qualify for a loan !

What Type of Loan Is Right For You?

When choosing a mortgage, find out about

• The down payment that is required
  
  
• Both the interest rate and the annual percentage rate (APR)
  
  
• Standard closing costs (and any extra fee the lender may charge and why)
  
  
• The possibility that your mortgage will be resold on the secondary market

There are many different types of loans available.

Conventional Mortgages. A conventional mortgage offers a fixed rate. They typically come in 10, 15 or 30-year loans. Although conventional loans used to require 20% down, most people today put 10% down (68% of buyers today put less than 20% down). Just keep in mind, if you put less than 20% down, you'll be asked to carry private mortgage insurance (PMI). If you're a first-time homebuyer, there are many low down payment loans available that ask for 3-10% down.

Adjustable Rate Mortgages. Adjustable rate mortgages carry an interest rate that changes to keep pace with current market rates. This is a good idea for buyers planning to stay in their home for a short time. If you plan to stay in the home for an extended period of time, you're better of locking in a fixed rate with a conventional loan. When deciding whether an ARM is right for you, determine the following:

• Will I be able to afford higher mortgage payments if interest rates go up?
  
  
• Will I be making other sizable purchases in the near future such as a car or college?
  
  
• How long do I plan to own this home?

FHA Mortgages. Loans through The Federal Housing Administration (FHA) help low-to-moderate income home buyers purchase homes with low down payments (approximately 3%). You can use a gift or unsecured loan for the down payment and closing costs. Also, these loans are usually assumable (along with the current interest rate) by the next qualified home owner when you sell your home, which is an added benefit when it comes time to sell.

VA Mortgages. Veteran Affairs loans are great because they provide the opportunity to buy a home with no down payment. They are offered up to a predetermined loan amount (not more than $200,000) and are assumable by qualified buyers. To qualify for a VA loan, the veteran must be on active duty or have a discharge (other than dishonorable), along with one of the following:

• 180 days active (not reserve) duty between September 16, 1940 and September 7, 1980
  
  
• 90 days service during a war (Korean, Vietnam, Persian Gulf, etc.)
  
  
• Six years service in the National Guard

If you put less than 20% down on a loan, you will likely have to pay PMI or Private Mortgage Insurance. PMI protects the lender against a loss in the event of default by the borrower. You can ask your mortgage company to remove the PMI if you've paid 20% of the loan. However, you will be asked to provide an appraisal.

Most lenders require you pay real estate taxes and insurance on a monthly basis. This cost is included in your monthly mortgage payment, placed in an escrow account, and paid out by your mortgage company.

By securing financing, you are well on your way to your next home!

For Mortgage Information

CLICK HERE to Pre Qualify for a loan ! 

Searching for a Home

OK, this is where the fun begins! Actually looking at homes for sale.

Beginning your home search

Become familiar with the area where you're considering buying in order to determine if it meets your needs (e.g. near a park, shopping, public transportation, etc.) Drive around. Attend open houses. Talk to friends and colleagues. You may want to select two or three neighborhoods to broaden your options.

It may also be helpful to take photos of each of the home's you're interested in. Make personal notes on the back. This will help you stay organized and remember what you've seen.

You may also want to create a profile of the home you're looking for in your next home.

• Goals - why are you buying a home?
  
  
• Features - what you need vs. what you want?
  
  
• Location - is it close to work, in a particular school district, near shopping, etc.?
  
  
• Style - what type of home fits your needs, lifestyle and taste?
  
  
• Lot - what is the size? What does it feature (wooded, fenced in, etc.)?
  
  
• General condition - is it in good shape?
  
  
• Neighbors - try to get an idea of what kind of neighbors you will have.
  
  
• Taxes - verify taxes and any current assessments on the home you're considering buying.

CLICK HERE FOR BUYER APPOINTMENT 

 Open Houses. Check out the local newspaper and local real estate websites to identify open houses you would like to attend. Or Request a list of Open Houses from me by phone or email.

Making an Offer

Congratulations! You've found the home of your dreams! Before you make a formal offer, you need to make sure the home is priced correctly. You don't want to overpay. Typically used when selling a home, a comparable market analysis (CMA) lists the recent sale information of nearby homes, including how long each home stayed on the market, how close the asking price was to the actual sales price, etc. It then compares the information regarding these houses with the one in question. If you're using an agent, they will do this for you to help you determine a realistic price. There are several online appraisal services that can provide you the same information as a CMA. 

As you go through this buying process, remember that everything is negotiable, and everything should be in writing. You should be very specific when you prepare your purchase offer, and the seller should be equally specific when they issue their counter offer. Don't forget to think ahead in terms of the top price you're willing to pay. It's a very emotional time and making some decisions early on is a good idea. Other tips include�

• Don't make a verbal offer.
  
  
• Don't offer full price unless the home is a real steal. You need room to negotiate.
  
  
• Include home inspections. Make sure you have an "out" written into the contract if the inspection turns up major repair problems that cannot be resolved with the seller.
  
  
• Make sure the contract includes an "out" in the event you cannot secure financing.
  
  
• Earnest money proves to house sellers that you're serious. After all, they're going to take their home off the market on your behalf. Earnest money is typically between 1-5% of the purchase price, but less is possible. The money should be held by an attorney or title company in escrow. Never give the money directly to the house seller. Such a deposit does not mean you're bound to the contract. Your full deposit is credited toward the down payment and closing costs.

Once your offer is accepted, it becomes a binding contract, so be sure to include the necessary contingencies. Contingencies are clauses that, if not met, will render the contract null and void. Common contingencies are the sale being subject to approved financing, the sale of an existing home and/or a satisfactory home inspection.

Home Inspections

You've made your offer. Now you need to have an expert verify "what you see is what you're buying." A formal inspection determines if anything needs to be repaired or replaced. If you're using a real estate agent, they'll arrange the inspection for you. If you're on your own, make sure the contract indicates who pays for the inspection and whether you or the seller is responsible for any necessary work. The contract should also include a contingency in case the inspection reveals any repairs that cannot be resolved with the seller.

Licensed home inspectors inspect homes to determine what, if anything needs repairing or replacing. Typical inspections may include...

• Termites - signs of termites in the home or foundation.
  
  
• Plumbing - checks for leaks, dripping faucets, toilet tank leaks, etc..
  
  
• Electrical - up to code? Checks that all light switches and wall sockets are working properly
  
  
• Exterior - settling cracks, paint peeling
  
  
• Interior - signs of leaks in walls or ceilings, structure and general condition
  
  
• The Roof - checks for leaks or damage
  
  
• Windows- good condition and sealed
  
  
• Insulation - up to code?
  
  
• Appliances - checks that they work along with heating and air conditioning units
  
  
• Radon Gas - an odorless and colorless gas that is sometimes found in the earth's rock and soil
  
  
• Lead-Based Paint - some older homes may still have lead-based paint that can be hazardous if ingested
  
  
• Asbestos - homes built in the early 1970s and before often had asbestos tile floors and asbestos ceiling tiles. This substance poses a health risk and must be removed

The home inspector will write up an inspection report with all minor and major defects itemized. Good inspectors will find minor flaws in nearly any home. It's up to you to decide how important they are. It is also helpful to be present during the inspection. Inspectors often provide you tips on the maintenance and upkeep of the home and its systems.

Now that the inspection is done, it's time to move into the title and closing phase.

Understanding Title Insurance, Appraisal and Homeowner's Insurance

Some people can get confused about this area of the real estate transaction, but with a little knowledge and guidance, it's easy to understand. We'll break down the basics for you.

Title Insurance

When you buy a home, a title company examines the chain of titles (previous owners) to insure that there are no problems with obtaining clear title to the property. Parties other than the current owner of the home may have rights to it for things such as mortgages, liens due to unpaid taxes, lien claims to those who the owner owes money, etc. As a new owner, you may know nothing about these risks, but you are still vulnerable to such claims on your property. A deed is not sufficient protection. That's why title insurance is necessary.

It is very common for title companies to also handle the escrow portion of the transaction, meaning they serve as a neutral party to exchange funds and make sure both parties adhere to the agreed upon terms of the contract.

Home Appraisal

Lenders require appraisals to confirm that the home for which they're providing you a loan is in fact worth the amount you're paying. Appraisers are independent agents normally hired by the lender, however you may have a choice. The fees appraisers charge vary and are typically built into your loan costs. Your lender may also require a Location Survey that certifies the house is within the boundaries of the lot. The lender often selects the surveyor, but again, you may have a choice. The lender usually pays for the cost of an appraisal. Then it's factored into the buyer's closing cost.

Homeowner's Insurance

If you are not assuming the seller's homeowner's policy, you will need to buy your own. Title will not be transferred until you can prove you have the home covered by insurance. This protects you for things such as fire, flood, tornados, or any other damage to the home. You may also consider additional levels of insurance to cover natural disasters that are more prevalent in your area.

Escrow and Closing

Congratulations! You're only a few steps away from being in your next home! You've purchased a home, but you don't actually own it yet. You need to close on it. This is known as closing or settlement.

The escrow agent conducts the closing and is often affiliated with the title insurance company. Their job is to ensure the buyer obtains a clean title, the lender obtains a good mortgage, that the costs of the transaction are paid, that the seller's mortgage is paid off, and that the seller receives their proceeds.

The escrow agent prepares a closing statement that outlines what the required funds are, who's paying and where the funds are going toward They will not disburse funds until they can guarantee that the above noted items have been taken care of.

Home Warranty - It's highly recommended that you purchase a home warranty. This will cover the repair or replacement costs in case items such as appliances break down after you purchase the home. The peace of mind is worth the expense.

There's nothing like the American dream of homeownership. The pride and stability you feel when you come home to a place that you know is yours is hard to describe.

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